Essayist Anusar Farooqui makes the case that we are witnessing the final break from neoliberalism in the United States.
Anusar Farooqui writes on Substack as Policy Tensor.
Show us some love by leaving a rating or a review! RateThisPodcast.com/pitchforkeconomics
The Making of the Mother of All Economic Booms: https://policytensor.substack.com/p/the-making-of-the-mother-of-all-economic
Website: https://pitchforkeconomics.com/
Twitter: @PitchforkEcon
Instagram: @pitchforkeconomics
Nick’s twitter: @NickHanauer
Speaker 1:
From the home offices of Civic Ventures in downtown Seattle. This is Pitchfork Economics with Nick Hanauer. The best place to get the truth about who gets what and why?
Nick Hanauer:
I’m Nick Hanauer, founder of Civic Ventures.
David Goldstein:
I’m David Goldstein, senior fellow at Civic Ventures.
Nick Hanauer:
So, Goldy, today we get to talk to a very, very interesting person named Anusar Farooqui. And Anusar is a blogger basically, but remarkably brilliant. I think he’s a mathematician turned physicist. He came to my attention because an article that he wrote called the Making of the Mother of all Economic Booms was circulating among some policy makers that I collaborate with. And we thought it’d be really fun to talk to him directly. So in this essay, Anusar argues that the Biden administration is making this really profound break with the last 45 years of neoliberalism. And that that break is going to create probably the biggest economic boom in collective memory, probably since the ’60s. And that will absolutely create the kind of broad-based growth and benefits that should both transform the economy and also potentially politics, which is an even more important achievement and kind of runs through how we went wrong and what the assumptions were that led us astray and how the Biden administration and the folks in that world have broken with that and are now on a new path.
David Goldstein:
Yeah, on the path to broad-based growth. And as he calls it, “The Mother of all Economic Booms.”
Nick Hanauer:
Right, let’s talk to Anusar.
Anusar Farooqui:
My name is Anusar Farooqui. I do research in a whole bunch of subjects. Online, I go under Policy Tensor. I used to write policytensor.com, but I’ve since changed it to policytensor.substack.com with a bunch of other writers and researchers.
Nick Hanauer:
We’d love for you to take us through the main planks of your argument and analysis.
Anusar Farooqui:
Sure. Your listeners obviously must have heard a lot about the wages of neoliberalism. And so the inequality and the slowdown in growth and the kind of patterns that we’ve seen since the ’70s, since the onset of neoliberalism. And what I think has happened, which is the main thesis in that essay is that we have finally broken through, and elites in the United States today, and technocrats in particular, have come to the conclusion that the only way to stop the political instability, which was revealed in 2016 is to restore broad-based growth, right? And so the project of restoring broad-based growth, requires what Yellen was talking about a couple of days ago, which is, “You got to go big on public investment.”
Public investment has been declining, and is really low by historical standards. We must restore it. What is the objective? The objective is to restore broad-based growth. The same thing with the Feds, a new commitment to empiricism. The Fed basically now saying, “We are not going to hike unless… We’re not going to remove accommodation unless we see inflation instead of just predicting it by models.”
So, much of the piece was about the intellectual revolution within the Fed technocrats and the political needs driven by the electoral clock of the election in two years and so on. That we need to go in big. We need to do something now. We need to show results before we go to the borders again. So that logic has driven, packed a lot of action into these two years, right?
Nick Hanauer:
Yes.
Anusar Farooqui:
My question was, how did we get here, right? In a larger sense. And the larger sense that I have of how we got here is different from the usual accounts you find which is, blames either technology, so skill bias, technical changes, but technical is a word that economists use, right? Which is a way of saying, there’s an [inaudible 00:04:55] technological [inaudible 00:04:56]. And we don’t have an account of how it happened, but what it did was it increased the wages of highly skilled workers and reduce those of middle skilled workers and hollowed out this economy.
But it was this [inaudible 00:05:07] or this globalization idea that foreigners were responsible. German competition, Japanese competition, Taiwanese, Korean and Chinese. Ultimately China becomes the big boogeyman, right? So, China is responsible but China has not been responsible for the destabilization of US manufacturing, for the decline of productivity growth and US manufacturing, for the decline of good, well-paying, manual, skilled jobs. That story doesn’t add up, right? And I think what is really going on now instead of these two objects, you have a different kind of logic operating. And I think of these as the logics of discipline, so what you have is, the crisis of the ’70s, [inaudible 00:05:43] crisis destroys belief in the ability of politicians to manage the macroeconomy. So they are told to stand aside and new institutions are built in order to constrain their action, right?
So the Europeans go well, well beyond anything that [inaudible 00:05:57] on this, right? But what is happening everywhere is the same. The treasury and the finance ministers are empowered to control the spending ministries. The bond markets are brought into discipline sovereign borrowing and spending and budget decisions, and so on. And a series of institutions are created to discipline governments, financially discipline governments, largely the work of the bond market. And this comes together with that famous quote from [inaudible 00:06:27] who tells Clinton, “When I die, I want to rise again. I want to be born again not as a baseball hitter, but as a bond market. You can intimidate anybody.” Right?
Nick Hanauer:
Right. Yeah, yeah.
Anusar Farooqui:
That logical discipline comes together with the rise of finance, with the whole [inaudible 00:06:45], right. But my point is that this extends very deep. It extends into industry. So all of the firms, too, the great industrial firms, which are responsible for the mid-century productivity growth, which are responsible for the growth of the American working class. And the achievement of middle class standards that was the envy of the world. That whole thing was tied at the hip to the productivity and the dynamism of these industrial firms, which were brought under the discipline of finance to buyout firms, the Barbarians at the Gate story, right?
The buyout firms, the private equity firms went in and really created a market for corporate control, right. And they disciplined these firms and made them disgorge their services to finance and to essentially move away from a long-term investment and investment in long-term productivity growth and towards the short-term model where shenanigans, financial shenanigans… you borrow money from the bond market and you do some buybacks or something. And that massages the returns of the stock, which is very good.
Nick Hanauer:
But basically, the primacy of shareholder value maximization as a business ethic and modality of operation, right? The dominance of that. Yeah, for sure.
Anusar Farooqui:
Right, right. But what I’m saying is that these firms themselves became targets. So the relationship between finance and industry completely reversed.
Nick Hanauer:
Yes.
Anusar Farooqui:
Where bankers have waited on the industrial firms’ CEOs. It was now the CEOs who are reporting to the financial analysts and this relationship of power between Wall Street and industry is crucial to why dynamism vanished from the manufacturing sector. This is at least part of the story. The other two parts of the story… So I talked about this monetary discipline. I talked about the discipline of governments and the discipline of the firm, the discipline, the forces displaying these firms and governments and economies. And the bottom of the monetary [inaudible 00:08:44] is crucial because what happened with the Feds and the other hard currency issuing central banks, is that once they were committed to price stability at all cost, and they started hiking and anticipation of inflation, that introduced a very strong deflationary bias in the system, kind of what happened in the gold standard, right?
Nick Hanauer:
Yeah.
Anusar Farooqui:
And a strong deflationary bias. And the whole world economy was introduced by the reaction function of the Fed and the ECB. And the bank of Japan was the first [inaudible 00:09:08] to actually from this rigidity of the mind, right? All these processes are unfolding, and this is leading to a decline in middle skilled jobs and to the hourglass economy [inaudible 00:09:20] in the ’90s and income growth stalls for the bulk of the population.
Nick Hanauer:
Right.
Anusar Farooqui:
And so the sheer number of jobs disappear for high school graduates, right? And this is devastating for working class families which… Their divorce rates keep going up even when the middle class divorce rates stabilize, their child out of wedlock rates going up, even after the middle class child out of wedlock rates stabilized from the ’90s, mid-90’s onwards. And they just keep declining. And so working class families are devastated. And this starts showing up in depths of despair, beginning at the turn of the century, right? And that is a huge story because depths of despair is the single best predictor of the swing towards Trump in 2016, it’s really the pain of working class America.
Nick Hanauer:
Yeah, right.
Anusar Farooqui:
That leads to that [crosstalk 00:10:07], and this is not really properly understood. People think it’s racial resentment, and so on, so on. Those are secondary logics. That’s not what’s driving the anger in the first place.
Nick Hanauer:
So as I read your essay, I was super impressed by the analysis. And it is consonant with our own analysis, but it’s not the same. And a big part of our analysis is that the world and particularly the left, which is where the problem lies, bought the neoclassical, neoliberal framing of economic cause and effect. And the simplest way to explain it is the pervasive view that there is this mechanical relationship between wages and the number of jobs. And if wages are pushed up, then the number of jobs will go down because the economy is this parade of optimal equilibrium within which if one thing goes up, another thing has to go down. And that view was totally pervasive on the progressive left, even among left-leaning economists, which is sort of the fuel for the neoliberal fire, right? It’s the Summers, Olivier Blanchard view of inflation.
It goes on and on, right. That anything that happens to wealthy people is an unalloyed good, right? The size of the bonus pool at Goldman Sachs is by definition, a good thing. That’s fine, but God forbid we send some unemployment insurance to working people. That will kill jobs or harm incentives or whatever it is. And so one of the things that I found so interesting about your analysis, which is I think dead-on, is how you connect a neoclassical economic theory and the weaponized version of that, which is neoliberalism with these macroeconomic policies and behaviors.
Anusar Farooqui:
I think that the connection is at the [inaudible 00:12:06] of the hip. And here’s how I think about this. It’s not so much that you have these new Keynesian DGSE models that the technocrats really buy. This is what the economy looks like, right. It’s not the technical understanding of the economy that is at stake. What is at stake is the model economy, right? So you’re convinced what you’re really deep down convinced about all of them, Summers, Blanchard, the whole works, and even Yellen until this year, what you-
Nick Hanauer:
Recently, yeah.
Anusar Farooqui:
… what you’re really, truly convinced about is that you can’t have your cake and eat it, too, right?
Nick Hanauer:
Yes.
Anusar Farooqui:
Big trade-off, right? So if you’re going to have deficit spending, it’s going to create some problem. Maybe it’s not inflation. Maybe it’ll be a run on your currency, maybe it will be a run on the dollar. Then everything goes down, you’re going to have to pay, right? And so this is a question that is really tied very closely to the kind of moral commitments of these theses, right?
Nick Hanauer:
Right.
Anusar Farooqui:
And of all of current postmodern [inaudible 00:13:02] in general, right [crosstalk 00:13:03].
Nick Hanauer:
That’s right, exactly. Because if it is a parade of optimal equilibrium system, that has to be the case. [crosstalk 00:13:11]. It’s a closed system.
Anusar Farooqui:
Exactly.
Nick Hanauer:
It has to be true. The problem, of course, is it’s not that kind of fucking system.
Anusar Farooqui:
That’s not how it works.
Nick Hanauer:
It’s not how it works. It’s an open, complex, adaptive ecology with energy pouring into it.
Anusar Farooqui:
Exactly, from the outside [crosstalk 00:13:29].
Nick Hanauer:
You can’t have your cake and eat it too. Yeah, exactly.
Anusar Farooqui:
I completely agree. This notion that you can understand it like a closed system, [inaudible 00:13:36] five equations. And then that works just… it just doesn’t hold any water, not after we know what kind of openness and extraction that is constantly necessary. You need to constantly extract a larger and larger portion of the world’s resources to keep this humming. And you need to dump larger and larger amounts of carbon and other garbage into the system. And so it’s not a closed system, it’s an open system. It wouldn’t survive if it were a closed system. That’s one thing. The other thing that more particularly… Just going back to that idea of not having your cake and eat it, too, right. It’s coupled to this idea that something’s going to go wrong if we have deficits.
And these things are baked into people’s minds from the ’70s, right. So the big fear is macroeconomic instability of some kind. And this is the main constraint on action, right? So the main constraint on climate action, the main constraint on action on restoring broad-based growth is this intellectual rigidity, which says that there are definite limits beyond which you can’t push the economy or you can’t push public finance. So the question of fiscal responsibility and the question of prudential responsibility, I think is crucial. On this, we know how to talk about this in a more informed way, in a more empirically grounded way, and away from those theoretical ways of thinking about this in a five equation frameworks way. On this, we can move away from that theoretical moral commitment, and talk about it in a more realistic way.
What is the [inaudible 00:15:07]? The concern is [inaudible 00:15:08] borrowing is what bond market participants will accept. And as the main provider say, [inaudible 00:15:14] in the system, that constraint is completely slack, right?
David Goldstein:
Yeah, right.
Anusar Farooqui:
The Fed can print an arbitrary amount of money, that constraint is completely slack, right? The only constraint on the Fed is inflation itself, right? And then you must talk about the process of inflation and what has happened with inflation and what has happened to inflation is globalized. You need to make these intellectual moves, but before you get to a place where you can be freed from the old rigidities that prevent a decisive action on the main challenges of the day.
David Goldstein:
So I’m curious, I mean, and we’ll get to this in a moment. You’re talking about how this change we’re going through now was the making of the Mother of all Economic Booms. Are you implying we could have had an economic boom all along-
Anusar Farooqui:
Absolutely.
David Goldstein:
… over the past 45… So none of the dislocation, none of the inequality, none of the slow growth was necessary or unavoidable had we not had this swing towards neoliberalism?
Anusar Farooqui:
I’m absolutely certain of that. The reason is that we could have, for example, the Fed could have always run the economy really hot, which is what they’re now plan to do, right. They could have always run the economy really hot. Well, that could have meant was that low-skilled workers wages, middle-skilled workers wages, people with high school degrees, their wages would have grown at the same rate as college graduates’ salaries, and professional class salaries, which have exploded, right? And so this is why I’m saying that it’s a basic systematic pattern of the behavior of the major institutions of management. That is the real conditioner. That is what created the [inaudible 00:16:44] downside, right?
David Goldstein:
Yeah.
Anusar Farooqui:
And once you destroy them, or once you dismantle these institutions, these unities, then you immediately are free. Like the way the British economy started booming immediately right after they went off gold in 1931, right. Then let themselves into going back to gold in 1925, at pre-war [inaudible 00:17:04] of $486 a pound, right. And this bloodletting and they force themselves to go back at pre-war [inaudible 00:17:11]. And then they suffered this massive recession through the ’20s and then they went off gold in ’31 and everything was suddenly fine, right? That’s, I think, that’s the real model for it.
David Goldstein:
Nick and I are old enough to remember the 1970s and the gas lines and the inflation, the stagflation, Paul Volcker gets credit for crushing inflation. My student loans in college for 12, 15%, because those are what interest rates were in the early 80’s, but he gets a lot of credit for driving up interest rates and crushing inflation and creating all that hardship. Could we have gotten inflation under control another way?
Anusar Farooqui:
I don’t think so, no. The preconditions, I agree with Paul on this. So the Chair, the Federal Reserve Chair in his last speech, which is what prompted my essay, he said that the key to the whole thing is inflation expectations are completely anchored on target, right? They’re not going to move, they’re going to stay at 2% plus epsilon, right? And that [inaudible 00:18:10] precondition on this inflation expectations are anchored on target. You’re playing with fire because anything could destabilize, right? If they move all over the place, then you really risk a spiral of inflation. And that’s what happened in the 70’s, right? Inflation expectations would be anchored in the mid-70s. And by the late 70’s, they were completely out of control and completely destabilized the management of the macroeconomy. So they had to be brought down.
And I think Volcker did the right thing, actually, and Carter was forced to appoint him because of the fall in the dollar. The dollar fell 20, 30% and very rapidly. And he was panicked into appointing the known inflation hawk to go and fix it. Then Volcker takes over, which is why I call this the Volcker coup, right. I’m following Duménil and Lévy, [inaudible 00:19:02] in 1979. But it was necessary. But what happens after you had stabilized inflation expectations. Inflation expectations would be completely stabilized by the early 90’s, mid-90’s, right? And what happens after that is that you stayed with this old rigidity that you need to keep hiking in anticipation of inflation, but when your models predict that there will be inflation a year down from now, which is the [inaudible 00:19:23] through the lag, that is the key. But you know, they’re going to screw this up again. [inaudible 00:19:30] through the lag, right. It means that they are not looking at the data, they’re using the model predictions to design policy. And that’s really a catastrophe for the [inaudible 00:19:39].
Nick Hanauer:
Among my group of advocates for reform, one of the things that we’re all speaking about is how surprised we are by the quality of the execution of the Biden administration so far. It’s just actually shocking, the degree to which they have married the right narratives with the right policies.
Anusar Farooqui:
It is very pleasantly shocking. I must confess.
Nick Hanauer:
Just everybody’s is like, “What the hell?” And the feebleness of the opposition. Ideologically, the other side has just surrendered, all of a sudden.
Anusar Farooqui:
The GOP is having an existential crisis. They are not available for the conversation. I will say that the Biden administration is making a catastrophic mistake on climate. They seem to be unconvinced that a decisive action is necessary on that front. And that is very dangerous because we don’t have much time.
Nick Hanauer:
My friends who are in the climate space are pretty satisfied. They wish it was more, of course, with the embedded climate action in the infrastructure bill. They feel pretty strongly these are huge steps.
Anusar Farooqui:
I wouldn’t say that as being [inaudible 00:21:01]. It’s not nearly enough.
Nick Hanauer:
Okay.
Anusar Farooqui:
The scale of the transformation required for this is an order of magnitude larger than what’s already contained in the infrastructure bill and the other bill being considered by the White House. The scale of investment that they have in mind is kind of around what Warren had in mind, $200 billion a year. It’s going to be at least a trillion a year. And the reason is that you need to change your entire supply chains. You need to change how the energy infrastructure works. Millions and millions of jobs have to be created to truly energy transition. And it’s not just going to happen with a couple of $100 billion a year.
Nick Hanauer:
I think that the Biden administration is very shrewdly positioning the entire infrastructure bill, which does include a lot of things for climate change and other priorities for people as a jobs bill, because that’s how you will generate the public support to push it over the line. And the simple truth is that despite the existential threat of climate change to the planet and the country, the majority of citizens in our country do not agree with you and have shown again and again, that they are not willing to support policies that involve near-term economic trade-offs for long-term benefits, because we have spent the last 45 years savaging their economic well-being. So this is the great conundrum, is you have created a citizenry that is so economically fragile, that any kind of trade-off you ask them to make is beyond their capacity, which is very challenging if you’re trying to do the right thing for the long-term.
Anusar Farooqui:
I’m not so sure about this. The reason I’m not so sure about this, because I don’t buy this trade-off. There’s no short-term, long-term trade-off. The energy transition will require running the economy hot for 10 years, it’ll require a large scale of public and private investment. And I think that the better way, is there a better way to financing it? And I’ve written about it with Albert Pinto, how to finance a green New Deal, but this idea that it’s going to hurt the working class, they’ll have to pay in the short-term, it’s just not possible. That’s not what anybody is proposing.
David Goldstein:
I agree with you that in the aggregate, there’s no trade-off, but there are certainly winners and losers. It complicates the politics of this.
Anusar Farooqui:
I completely agree that the political economy is the challenge, right? And that’s the main challenge. The main challenge is the political economy.
David Goldstein:
Yeah.
Anusar Farooqui:
So one way of doing this is to have a coalition of very powerful friends. And I think that is what is happening with the Biden White House. The Harris people and the Biden people, they have the backing of Silicon Valley. They have the backing of Wall Street. And that’s how you contain the fossil interest. If you want to have a real green transition, you need some really, really powerful people on K Street on your side. And I agree with that way of thinking about this, a political economy solution has to be found. The question is, what does that look like, right? Specific interests tied to, let’s say, fracking in Pennsylvania, may not be all solvable in detail, but a political coalition can be assembled and talking about money.
I’m not talking about people, I’m talking about people and money, right. A political coalition of voters and of moneyed interests can be assembled, which can back the energy transition, the politics of the energy transition, right? And so what I’m trying to say is this. Look, you created this new party system in 1930s, right? And this new party system in the 1930s was based on the hegemony of the Democratic Party. And this party system oversaw large scale transformation, and the GOP adapted to that world. And they began to adopt the rhetoric and the ideas of the Democratic Party and became part of that system. Something similar has to happen now, which is that a new party system has to emerge based on the hegemony of the Democratic Party, but this can’t happen unless you make some progress in solving the problem of past confrontation. The problem of… I think that’s the most serious challenge. The serious challenge is to restore elite [inaudible 00:25:20] somehow enough so that you can get backing for the next step. You need buy-in, you need buy-in.
David Goldstein:
So let’s talk about what might get us that buy-in. And that is getting back to the title of your essay, the Mother of all Economic Booms. How big, what are we looking at?
Anusar Farooqui:
So the Fed is saying 6.5%, Goldman is saying 8%. I think, Goldman’s closer to the market, might be even slightly more. That’s just 2021, right? They can really sustain fairly high rates of growth for the next 24 months before the election. I mean, this is almost overdetermined at this point. We are going to have a very large economic boom. People are just going to come out and they’re going to want to let their hair down after the pandemic lockdowns and so on. There’s a lot of pent-up demand. What is really the main, the crucial key to the boom is that the Fed is ready to accommodate it, right? The Fed is ready to wait and see for inflation.
David Goldstein:
Yes.
Anusar Farooqui:
And that’s the crucial pre-condition.
David Goldstein:
Right.
Anusar Farooqui:
Without which it doesn’t work, right? And so now you have massive public spending. You have this pent-up demand and you have the Fed ready to be accommodating for as long as it takes. That is the recipe for really the best economic boom since the late ’60s.
David Goldstein:
And it’ll be broad-based. I mean, we had just before the pandemic hit, we had just started to see wages recover, wages growing. At the low end, I don’t know how much of that, where the minimum wage hikes that were passed in states around the country and how much of that was the market, but low wage workers, they should expect to benefit from this boom, too?
Anusar Farooqui:
Absolutely. So what we saw in the past 10 years is that as the labor market began to tighten, wage growth accelerated following the workers, and it started matching the salaries of [inaudible 00:27:11], the growth rate of salary [inaudible 00:27:14] loss. And that period of 2016, 2017 to 2020, 2019, that period saw an actual, real, genuine wage growth for the mass of the population. This is a lesson that has been really learned by the macroeconomists and Fed technocrats and so on. And what they’ve learned is that labor market’s tight doesn’t mean inflation because the Phillips curve is dead, but labor market’s tight means wage increases for everybody because the wage gap is the [inaudible 00:27:42] and key. That’s the key, right? So that’s how you can have your cake and eat it, too.
Nick Hanauer:
Right. No, absolutely.
David Goldstein:
You say the Phillips curve is dead. Was it ever a real, or was it just something that matched a couple decades of economic data and looked like it was real?
Anusar Farooqui:
No, I mean, it was real, it was real. I mean, it was real in the sense that before you had this unbundling of production outside the borders of… The answer to the big [inaudible 00:28:14] it’s the largest economy in the world and it’s relatively… You can think of it as a closed economy in a way that you can not think of Germany do that or even Japan, right. So what was happening at mid-century for these decades is that there was a genuine trade-off between inflation and employment, and that the Fed learned to manage. And that was the idea that they had gotten into their heads in the ’70s and ’60s, in the ’70s and ’80s. But the thing is that Phillips curve relationship, which was really truly existing for decades, increasingly broke down because of what happened to the supply chains of these firms.
So now these supply chains are spread out over Canada and Mexico. And some run into China, some [inaudible 00:28:55] into Southeast Asia and this entire global production system… We saw a perfect illustration of this when that ship in the Suez Canal, right… there were hundreds of these ships carrying billions, hundreds of billions of stuff, and mostly intermediate components across the world to keep the value chains running. And these value chains have very large excess capacity. And that is why inflation is really dead. Once you start running the economy really hot and the whole world economy, the US pulls the world economy out of recession in 2021, in 2022. Then you’re going to start seeing some tightening in these global supply chains. And then maybe a few years down the line, we might start to see inflation again, right? So, it’s not disappeared.
Nick Hanauer:
That’s right. But there’s another couple of things that have changed the relationship between unemployment and inflation over the last 40 or 50 years. One of them is that it has just become at least in order of magnitude easier in all sorts of ways to generate more capacity in whatever industry you’re in, right? It used to take years to set up a factory. You can do it in months, today.
Anusar Farooqui:
Yeah, you can do it in months, so easy. Oh my God.
Nick Hanauer:
It’s just so much easier to generate capacity. And the other thing of course is Goldy was pointing out earlier, is that there are so many goods and services that are made not out of atoms, but out of bits.
Anusar Farooqui:
Right.
David Goldstein:
Yeah.
Nick Hanauer:
Where your capacity is infinite-
Anusar Farooqui:
Zero cost investments, yeah.
Nick Hanauer:
Zero.
David Goldstein:
You just buy a little bit more space on AWS and on Amazon servers. And there you go, it’s in spin up a few more drives and that’s it.
Nick Hanauer:
So Anusar, let’s conclude with this question, aside from the climate change point that I think you wisely made, what other advice would you have for the Biden administration?
Anusar Farooqui:
I think the Biden administration needs to figure out how to talk about anti-racism with the working class, the white working class. And I think this is a challenge for progressives as a whole and for the Democratic Party and the left of the Democratic Party as a whole. Which is, they don’t know how to talk about it. Right now, the way they talk about it does a lot of classwork and people hate it. People really hate it.
Nick Hanauer:
Yeah.
Anusar Farooqui:
And it’s become the currency of status competition, which is very unfortunate because it is a necessary revolution in attitudes. Right now, what they’re doing is they’re keeping a lid on it. They don’t want to talk about it.
David Goldstein:
Right.
Anusar Farooqui:
Which is fine for the temporary, for the first phase of the operation, if you will, but it is not a long-term solution. In the long-term, you need to figure out how to repair relation with the white working class, which has now become the Republican Party, right? And that would help even if you can’t win them back really, that would help change the tone of the GOP. That would change the norms by which the GOP elites mobilize their voters. And that conversation has to be won, but not be won by scolding from the pages of the New York Times.
Nick Hanauer:
That’s right. But what it will be won by is actually delivering the economic goods to middle-class people.
Anusar Farooqui:
Yes.
Nick Hanauer:
For the first time in 40 years, it won’t get them all, but it will get some of them, and proving again to people that government can be a force for good, that policy can make a difference, a positive difference in people’s lives. And a political party can be on the side of ordinary people, not just rich shitbags like myself. So, yeah.
David Goldstein:
And what do you recommend for neoliberals? What should they do in response to this crisis of faith they must be having right now? Is it over, are they done? Should they just surrender?
Anusar Farooqui:
I don’t know what they… I mean, they should change their minds in light of new information, but I don’t know what they will do. I suppose, I really enjoyed watching Summers’ rant and rave. It felt-
David Goldstein:
That was so fun.
Anusar Farooqui:
It would be like if you’re just following policy change and Kissinger will rant and rave on Tucker Carlson Tonight, like that. It was that kind of moment. I really savored it. [inaudible 00:33:25] on Friday.
Nick Hanauer:
Yeah, I know. I agree. I don’t think Larry Summers cares at all about inflation. He cares about relevance. Well, listen, Anusar, thank you so much for being with us.
David Goldstein:
We are going to ask the final question.
Nick Hanauer:
Okay. Let’s ask the final question.
David Goldstein:
Okay.
Nick Hanauer:
Go for it.
David Goldstein:
We ask this of everybody. Why do you do this work?
Anusar Farooqui:
I don’t know how not to.
Nick Hanauer:
That’s a good answer.
Anusar Farooqui:
I can’t stop myself.
David Goldstein:
I was a blogger for a number of years and I was nuts that… I couldn’t not do it.
Anusar Farooqui:
[inaudible 00:34:04].
David Goldstein:
So I understand that totally.
Nick Hanauer:
That’s great. But in any case, as you develop ideas, we’ll be watching, but if you think that there are important things that folks are missing or need to be highlighted, we look forward to hearing more from you about that. So again, thank you so much for being with us. This was really, really a fun chat.
Anusar Farooqui:
My pleasure.
David Goldstein:
Great conversation.
Nick Hanauer:
Okay, we’ll talk soon.
Anusar Farooqui:
Bye bye.
Nick Hanauer:
All right.
David Goldstein:
Bye bye. Who’d have thought, Nick, Bidenomics, that we’d be talking about Bidenomics. I mean, I got to admit I was a Warren Democrat.
Nick Hanauer:
Yeah.
David Goldstein:
Elizabeth Warren was my first choice. My second choice was Bernie Sanders, right?
Nick Hanauer:
Right.
David Goldstein:
Biden as the means towards a New Deal, who’d have thought, Nick?
Nick Hanauer:
I know. And people are frankly astounded by how well these folks are executing and how little there is to criticize in the approach that they have taken so far. Because for sure, my experience in my political career has been largely intense frustration with the folks that theoretically are on my side and the Biden people are just crushing it. I definitely was not disappointed in our conversation with Anusar, he’s clearly just a brilliant guy and a deep thinker and a great researcher. And I hope that we’ll get to hear a lot more from him about macroeconomics and policy.
David Goldstein:
And also looking forward to him being right about his projections of 8% growth with no inflation.
Nick Hanauer:
That’s right. His recent article is in the show notes. We highly recommend folks read it and subscribe to his substack. Think you’ll find an astonishing array of writing there across really interesting subjects. And he’s just a really interesting guy and we’re following. And in the next episode of Pitchfork Economics, we get to talk to my friend Mariana Mazzucato , one of the world’s foremost economists on a mission-based economy.
Speaker 1:
Pitchfork Economics is produced by Civic Ventures. If you liked the show, make sure to subscribe, rate and review us wherever you get your podcasts. Find us on Twitter and Facebook @ Civic Action and Nick Hanauer. Follow our writing on Medium at Civic Skunk Works and peek behind the podcast scenes on Instagram @ Pitchfork Economics. As always from our team at Civic Ventures, thanks for listening. See you next week.